Liberal activists say stories of fraud were isolated anecdotes and that under new, stricter rules, children whose families truly need help are losing Supplemental Security Income, or SSI.

They also allege the cuts were budget-driven. The government plan is to save $5 billion over five years, a projected removal of 135,000 children from the rolls, out of a total of 1 million.

Tougher scrutiny

The Clinton administration is caught in the middle. And in an effort to defuse the strong emotions, the new commissioner of the Social Security Administration (SSA), Kenneth Apfel, began on Sept. 29 a 30-day top-to-bottom review of the program. His report is due out in the next 10 days.

"The children we're taking off the rolls have real limitations but no longer meet the standard in the language of the law: 'marked and severe functional limita- tions,' " says Susan Daniels, head of SSA's disability programs.

"They will need community support, special education, state services," she says, adding that these children will still be eligible for public health insurance under Medicaid. "We don't want anyone to characterize these children as fakers or malingerers."

Ms. Daniels notes that four separate studies found no evidence of "widespread abuse" in the children's SSI program.

The average monthly payment per child is $410. The purpose of the payments is to help low-income families cope with the costs of having a disabled child, such as a parent's missed work time or special equipment.

One aspect of the cutbacks that disturbs children's advocates is that cutoff rates vary widely from state to state. Of the total national caseload, about one-quarter were slated for possible cutoff, and most assessments are completed. Mississippi has the highest cutoff rate - 82 percent of reviewed cases. The lowest rate is in Washington, D.C., at 36 percent. The national average is nearly 60 percent.

As of Oct. 4, the date for which the most recent data are available, 135,841 children had been removed from SSI. According to SSA, between 70 and 80 percent were receiving SSI for "mental disorders," such as retardation, psychotic disorders, learning disabilities, and attention-deficit disorder. Many have already appealed, and more than half of those have been reinstated - again, at widely varying rates.

Critics say that because case examiners had only a few months to complete 264,000 reviews, there were bound to be problems.

Jonathan Stein, a legal activist for disabled children, adds that the atmosphere of suspicion puts families at a disadvantage.

"Congress didn't say these kids should be cut off, it said, 'We'll review these kids again," says Mr. Stein, general counsel at Community Legal Services Inc. in Philadelphia. "But the climate created by the media and demagogic politicians in the early to mid-'90s made these families suspect, so when they were evaluated ... they got a very short shrift and a short-circuited review process."

Stein, who offers a stack of SSI-cutoff cases from around the country, says that in some cases, families are being hindered in their attempts to appeal.

In Philadelphia, Stein's group is trying to help the family of Hector Figueroa, a mentally disturbed teen, who was told he would lose SSI benefits. Three weeks later he wound up in a psychiatric ward.

In Chatom, Ala., one-year-old Clayton Sullivan, who has been diagnosed with hemophilia, was removed from SSI. His mother says his time-consuming treatments prevent her from working, and the family subsists on child-support payments from Clayton's father, food stamps, and help from Clayton's grandparents.

Many families don't want to go public with their situation, because of the negative stigma now surrounding kids on SSI.

On Capitol Hill, Rep. Jim McCrery (R) of Louisiana - one of the leading critics of the old disability standards - says many children on SSI deserve it. But he still holds that the old standard invited "widespread abuse."

"By widespread abuse," he says in an interview, he means the system encouraged "some parents to try to qualify their children, even though their children weren't disabled."

McCrery denies those being removed from the rolls were necessarily abusing the system. They just face a stricter standard.

History of revision

The old standard was in place for only seven years. Following a Supreme Court ruling in 1990, which found that federal disability rules was being improperly applied to children, the SSI rolls swelled. New categories of children, many diagnosed with behavioral disorders, were added to the rolls. In addition, states conducted outreach programs to help poor families access benefits.

The National Association of Disability Examiners agrees that the post-1990 standards were too lax and supports the new rules.

The group's spokesman, Tom Christopher, says no studies prove systematic abuse under the post-1990 standards. Rather, he says, those easier standards allowed children "without severe impairments" to receive federal benefits, and that was wrong.